Solaris taps US$80M Orion financing to advance Warintza copper project in Ecuador

Solaris Resources (TSX: SLS; US-OTC: SLSSF) has secured US$80 million in funding from Orion Mine Finance Management for the Warintza copper-gold project in Ecuador.

The deal is made up of US$60 million in senior secured debt, an offtake with a buyback provision, a subscription for US$10 million in equity and a commitment for US$10 million in additional equity financing, Solaris said in a release on Monday.

“This financing package funds the advancement of Warintza through studies and permitting, leading to a substantially de-risked project,” Solaris executive chairman Richard Warke said in the release. “It unlocks one of the last remaining major greenfield copper districts at low elevation and adjacent to infrastructure in the entire mining industry.”

Solaris, with investors including entrepreneur Ross Beaty and the Lundin family, is part of the Vancouver-based Augusta Group that has earned $4.5 billion from investments in Equinox Gold (TSX: EQX), Arizona Mining (TSX: AZ), Augusta Resource, and Ventana Gold. The company is pursuing the exploration trail left by the late David Lowell, credited with about a dozen major discoveries including the giant La Escondida in northern Chile now mined by BHP (NYSE: BHP; LSE: BHP; ASX: BHP).

Study funding

The loan has a four-year term, offers an initial US$30 million within weeks then more in staggered amounts when an environmental impact assessment and a prefeasibility study have been completed.

New York-based Orion, which has raised some US$8 billion for mining projects over the past decade, has an offtake agreement for 20% of production for 20 years after it starts at the 268 sq. km property in the country’s southeast.

The initial US$10 million in equity financing is at a Solaris share price of $5.11. Shares in Solaris opened on Tuesday at $4.60 apiece, valuing the company at $681 million. They’ve traded in a 52-week window of $7.53 to $4.57.

Solaris also has the early-stage Ricardo and Tamarugo projects in Chile, the Capricho and Paco Orco projects in Peru, and a 60% interest in the La Verde joint-venture project in Mexico with Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK).  

Warintza’s central deposit has 579 million indicated tonnes grading 0.47% copper, 0.03% molybdenum and 0.05 gram gold per tonne (0.59% copper equivalent), according to an April 2022 resource update. It has 887 million inferred tonnes grading 0.39% copper, 0.01% molybdenum and 0.04 gram gold (0.47% copper equivalent).